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									                      Records Retention & Destruction Policy

                                Metro Metro & Associates

                                              Purpose

Metro Metro & Associates (hereafter referred to as “MMA”) has developed this records retention
and destruction policy to provide written guidance for the retention and destruction of
workpapers developed or obtained by the firm since its existence. The purposes of the policy is
to comply with regulatory requirements of the state board of accountancy, to maintain evidence
of work performed, to provide background for future engagements, to provide practical guidance
to firm employees and clients regarding maintenance of workpapers for IRS purposes, and
finally, to provide clear direction to clients and employees about which records should be
maintained by the firm at the conclusion of an engagement, which should be returned to clients,
and which should be disposed of. The policy also provides instruction on how long records will
be maintained, how and where they will be maintained, and how they will be disposed of.

A copy of this policy is provided to all new clients at the completion of the first engagement, to
all existing clients at the inception of the policy, to all employees, and to any existing client upon
request.

                                            Definitions

Client Records
A client’s records are any accounting or other records belonging to the client that were provided
to MMA by or on behalf of the client. Examples of client records include, but are not limited to:
original W-2 forms, tax depreciation schedules, accounting records (for example, a general
ledger, a trial balance, or an account analysis prepared by the client), debt agreements, bank
and broker statements, purchase and sales contracts and other legal documents, cancelled
checks, and client provided computer disks, CDs, or tape backups.

MMA’s Records
MMA’s records include the firm’s original work papers, records of staff and client
communications regarding the engagement, correspondence with clients and third parties
pertaining to the engagement, copies or work product provided to the client, and copies of client
documents. These records may exist in electronic form such as emails, spreadsheets, image
files, and databases, or in physical form such as letters, faxes, pictures, sounds or other form.

MMA’s work papers including, but not limited to analyses and schedules prepared by the client
at the request of MMA, are MMA’s property rather than the client’s, absent a contractual
agreement to the contrary.

Examples of MMA records include financial reports and statements, copies of debt or stock
agreements, correspondence from any source regarding the client (including electronic or fax
communication), checklists, research information, and consultation memorandums.

          What Records MMA Will Maintain and the Client’s Right to Copies

MMA will maintain files, whether physically or electronically, with MMA’s records. All original
client records used during an engagement will be returned to the client at the completion of the
pertinent engagement.
It is the obligation of the client to maintain their original documents, and MMA does not assume
any responsibility to maintain them. If an engagement is terminated prior to completion, MMA is
required to return only client records.

In a completed engagement, MMA will provide to the client, upon request, and upon complete
payment of our standard fees, those workpapers containing information that is not reflected in
the client’s books and records, with the result that the client’s financial information is incomplete.
This would include adjusting, closing, combining, or consolidating journal entries, information
normally contained in books of original entry and general ledgers or subsidiary ledgers, and tax
and depreciation carry-forward information.

Once MMA has complied with the first request, MMA need not comply with any subsequent
requests to again provide such information.

On joint tax returns, both spouses are considered clients of the firm and have equal right to the
information contained in MMA’s records

With the exception of compliance with legal summons, subpoenas or Federal or state laws or
regulations, no copies of MMA’s records will be provided to third parties without the client’s
written approval.

                            How MMA Will Maintain the Records

Physical and/or electronic copies of MMA’s records will be maintained on site at MMA’s firm for
the period of time discussed in the retention period table provided below.

On-site physical records are maintained in a separate file room at MMA’s office.

Off-site physical records are maintained in a secure locked storage facility, which is
electronically and physically monitored for security.

Electronic records are maintained on a network file server. The file server is electronically
backed up daily, and the backup tapes removed to a secure off-site location weekly. The
network server is protected by an automatic shutdown uninterruptible power supply, which also
provides electronic surge and spike protection.

For security purposes, MMA locks all exterior doors and applicable interior doors when the
office is not staffed.

MMA has contracted with an external security company for fire and break-in monitoring and
immediate reporting to the authorities and to the managing partner of the firm upon occurrence
of a fire or break-in.

MMA maintains an insurance policy to reimburse the cost of restoring files.

The managing partner of the firm is responsible for the administration of the records retention
policy. As part of MMA’s quality control system, the managing partner’s designate (see below)
will annually monitor compliance with the records retention policy by reviewing selected files for
compliance with the policy.
In What Format Must the Records Be Kept?

All records should be kept in a manner that ensures the complete access to the IRS for so long
as they are material. While this is typically accomplished through the maintenance of hard
copies, records may be kept in an electronic format if certain requirements are satisfied.

The general requirements for an electronic storage system of taxpayer records are provided in
section 4.01 of Rev. Proc. 97-22. A Summary of these requirements is as follows:

In essence the computer system must:

   1.      be accurate and reliable
   2.      insure integrity and provide reasonable controls to prevent alterations
   3.      be inspected periodically
   4.      reproduce a legible hardcopy or computer monitor view that is at least as legible as
           the original paper version
   5.      be indexed
   6.      have an audit trail from original entry to the tax return
   7.      at the time of an exam, audit, evaluation, etc. by the IRS, resources must be
           provided to the IRS for retrieval of information.

Changes in Audit Documentation after Issuance of the Report
Audit documentation will include an index to the audit workpapers which identifies the
components of the workpapers. The workpapers will include the date the document or
workpaper was completed by the preparer and any reviewer, including their identity. Audit
documentation will also include the report date and the date of issue of the report.

Changes include any addition, removal, deletion, substitution, or editing of audit documentation,
including, but not limited to, physical or electronic additions to any audit documentation file or
pre-existing audit documentation, occurring after the date of issuance of the audit report which
is supported in whole or in part by the audit documentation.

During a 60 day period after the issuance of the audit report, documents may be added to the
file for assemblage and documentation of work performed. This policy does not authorize the
deferral of any audit procedure required to be performed prior to the date of the report


During a 60 day period discussed above, any changes in audit documentation shall provide the
identity of the person(s) making the change, identity of the person(s) approving the change, the
date of the change, and the reason for the change if the reason is other than the assembling of
previously issued documents. The documentation which is changed shall contain sufficient
detail to enable a reviewer with relevant knowledge and experience, having no previous
connection with the audit engagement, to understand the nature, timing, reason for, and extent
of the change.

Expected or pending litigation or regulatory inquiry
Upon becoming aware of any litigation, regulatory inquiry, criminal investigation or lawsuit
regarding the client, the firm, or the firm’s services, MMA will suspend the records destruction
section of this policy regarding the affected client(s), even if a subpoena has not been issued.
Any related engagement working papers and files will not be disposed until the matter is
resolved.

MMA will consult with MMA’s legal counsel before responding to any inquiries in this situation.
                      How Long Records Will Be Maintained by MMA


                                           Total Retention Period Years from Report
          File Description                                   Date
Audit-Annual Workpapers
                                                                     7
Audit-Carry-forward Workpapers
                                                                     7
Audit-Copy of Reports Issued
                                                                     7
Audit-Files for Correspondence
                                                                     7
Compilation & Review-Annual
Workpapers                                                           7
Compilation & Review-Carry-forward
Workpapers                                                           7
Compilation & Review-Copy of
Reports Issued                                                       7
Compilation & Review-
Correspondence                                                       7
Tax-Annual Return                                                    6
Tax-Annual Workpapers
                                                                     6
Tax-Carry-forward Workpapers
                                                                     6
Payroll-Registers                                                    6
Payroll Tax Returns                                                  6
Consulting Reports                                                   6
Consulting Workpapers
                                                                     6


Total Retention Period Years: Records will be destroyed after the number of years indicated from the
report date.
     How Will Records Be Determined to be Beyond the Retention Period and
                           Consequently Destroyed

Every year between July 1 and September 30, the managing partner will designate one of the
firm’s employees with the responsibility for reviewing files for compliance with the records
retention and destruction policy. The purpose of the review will be threefold; first, to determine if
the firm is complying with the records retention policy; second, to determine which client files
have fallen outside of the retention period and therefore should be destroyed; third, to authorize
disposal of the records.

Physical files selected for destruction will be separated and placed in a clearly marked “File
Disposal Area” in a secure area of the office prior to destruction.

Physical files selected for destruction will be shredded using a commercial, bonded shredding
service under our physical review.

Electronic files selected for destruction will be deleted using a commercial, multiple-pass
software program designed for such a purpose.

								
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